Rate of return – The ratio of net profits earned by a firm to total invested capital. This gain or loss could consist of income or capital gain/loss. It is most often given as a percentage. The real rate of return means that the annual return which means received has been adjusted for the effects of inflation.

Ratio/s – Refer to relationship of one amount to another. Ratios give the relative or differing sizes, often expressed as the number of times one variable is contained or related to another. The following is a table of some of the more common ratios used in most entry level business and accounting courses.

Ratio analysis - A numerical approach to investigating accounts by comparing two related figures. The process involves the process of converting of financial information for a entity into ratios. Ratio analysis allows comparison of an entity or time period to another entity or time period. Since the ratios look at specific relationships inside the entity, a entity of one specific size can be easily compared to a second entity. These firms may even be in different industry.

Rational choices - Choices that involve weighing up the benefit of any activity against its oppor­tunity cost.

Rational consumer - A person who weighs up the costs and benefits to him or her of each addi­tional unit of a good purchased.

Rational expectations - The theory that people understand how the economy works and learn quickly from their mistakes so that even though random errors may be made, systematic and persistent errors are not.

Reach – When used in relation to marketing or advertising refers to the total amount of individuals within a specific target market that will see or hear via the specific advertising campaign being undertaken.

Real - 1. in economics, refers to economic statistics which have been adjusted for for inflation so a comparison of actual purchasing power can be made. may also be called 'constant prices' Or 2. may also mean the actual cost and not the nominal one.

Real accounts - Accounts in which property is recorded. Examples are buildings, machinery, fixtures and invetory.

Real Exchange Rate
(RER) - The purchasing power of a currency relative to another at current
exchange rates and prices. It is the ratio of the number of units of a given country's currency
necessary to buy a market basket of goods in the other country, after acquiring the other
country's currency in the foreign exchange market, to the number of units of the given country's
currency that would be necessary to buy that market basket directly in the given country

Real growth values - Values of the rate of growth of GDP or any other variable after taking inflation into account. The real value of the growth in a variable equals its growth in money (or ‘nominal’) value minus the rate of inflation.

Real GDP - Total market value of all final goods and services produced in an economy in a year adjusted for the effects of inflation.

Real GNP - The output official goods and services valued at the prices of the base period.

Real income - Income expressed in terms of the purchasing power of money income, that is, the quantity of goods and services that can be purchased with the money income; it can be calculated as money income deflated by a price index.

Realised gain or loss – Is the difference between the amount received from the sale or disposal of an asset and its carrying value.

Reasonable certainty - The means that degree of certainty which could be expected to be found to be in existence by a hypothetical reasonable person.

Reasonableness test – Is a procedure to examine the logic of accounting information. It is where the expected value is going to be determined by data at least in part independent of the entity's accounting system, evidence that is obtained through the use of this approach may be in some circumstances more reliable than evidence gathered using methods.

Reasonable person - A hypothetical individual who uses qualities of knowledge, attention, intelligence, and judgment in making decisions. This individual is also considered to behave rationally.

Rebate - Is the term given when a service is paid for and then cancelled and some of the payers money is refunded. It may also be given by an organisation/government agency that has reduced it charges.

Recapitalisation – Is the process of changing a firm's capital structure by altering the mix of debt and equity financing without changing the total amount of capital.

Receipt - A source document given when money (or some other form of payment) has been made to an organisation.

Receivables - Are claims held against customers and others for money, goods, or services.

Receiver - An individual person appointed by the court who then takes the possession of, but does not take the title to, the assets and other affairs of a firm or estate that is in a legal form of bankruptcy that is called called receivership.

Recognition - 1. recording a business occurrence in the accounting records. An example is recognising an unrealised loss on an investment portfolio at year-end, when aggregate market value is below cost. In this case, the transaction is recognised even though realisation (sale) has not occurred. Or 2. ascertaining the particulars of an item (i.e., amount, timing) before accepting and recording it.

Reconciling- This is the process of ensuring accounts are accurate by comparing a businesses records with documents sent by a third party i.e. a bank statement.

Reconciliation – Refers to the changing, altering or adjusting of difference that exist between two or more items so that the data agrees. e.g. a bank reconciliation is conducted to ensure a businesses records agree with the banks records of the business activities.

Register - The official or formal recording of an item within a specific book/register, e.g., the fixed asset register.

Registration - 1. act or fact of making an entry of any class of transactions or statements for the purpose of documentation for future reference. Such documentation may be in the form of financial information noted in registers, such as a cash register. Or 2. process that requires publicly issued securities to be reviewed by the SEC. 3. recording of stocks or bonds in the owner's class="d-title" name as opposed to bearer's class="d-title" name.

Regression analysis - A statistical procedure for estimating the average relationship between the dependent variable (sales, for example) and one or more independent variables (price and advertising, for example).

Regressive income tax - An income tax where the portion of income paid in tax is lower for people on high incomes than for people on low incomes. The marginal rate of tax is lower than the average rate of tax.

Regressive tax - A tax that takes a lower percentage of income the higher the level of income.

Regulation – Refers to the act of controlling or directing according to rule i.e. it is the act of bringing to uniformity.

Regulations – Refers to the authoritative body of rules specifying details of procedure and conduct to be followed in accordance with such criteria as uniformity, efficiency, control, ethics, and legal considerations.

Reimbursement - Means to repay or pay back to an individual or entity, e.g. to pay an employee for items that were paid by that person's own personal funds.

Related party transaction – Refers to a transaction between different two parties, one of those parties can be considered to exercise control and/or significant levels of influence over the operating practices and policies of the other. A special relationship may be said to exist, e.g. a company and its largest shareholder.

Relationship marketing - An approach to marketing which seeks to strengthen a business's relationships with its customers.

Relative price - The price of one good compared. with another (e.g. good A is twice the price of good B).

Relevance - An item that is capable of making a difference in decision making. Information is available in a timely fashion before it loses its value in decision making.

Relevance concept - This refers to the accounting information being considered or offered ability to make a material difference to the specific external decision makers who are using the information in the financial reports. This is especially true in management accounting.

Relevant range – Refers to the span of activity over which a certain cost behaviour holds true.

Reliability - 1. in auditing, confidence that the financial records have been properly prepared and that accounting procedures and internal controls are correctly functioning. Or 2. in financial accounting theory, term describing information that is reasonably free from error and bias and accurately presents the facts. Verifiabilityexists when a reconstruction of financial data, following acceptable accounting practices, results in the same actual results previously attained; further, two accountants working independently will come up with similar results. Or 3. probability that a product or process will perform satisfactorily over a period of time under specified operating conditions.

Reliability concept – This concept refers to the quality of the accounting information that allows the decision makers to be assured that the information being represented in the relevant financial records and associated financial statements truly captures the actual operating and other conditions and events of the reported business.

Remittance – When a national of one country that is working in another country sends their income (or portion of) back to their original country. This is a very important source of foreign currency for many developing countries.

Remitting bank – Refers to the bank that has sent the draft to a bank overseas for collection.

Remuneration - The act of paying for an item or to recompense an individual or entity for losses (Example: receiving your pay).

Renewable resources - Productive resources that can be replaced as they are used up, as with physical capital; distinguished from non renewable resources, which are available in a fixed stock that can be depleted but not replaced.

Rent seeking - Behaviour whereby private firms and individuals try to use the powers of the government to enhance their own economic well being.

Reporting – The periodically furnishing others with financial information to aid in control or decision making.

Repos / Repo - Sale and repurchase agreements. An agree­ment between two financial institutions whereby one in effect borrows from another by selling it assets, agreeing to buy them back (repurchase them) at a fixed price and on a fixed date.

Repositioning - An attempt to change the views of consumers about a product relative to its competitors.

Representative (union) - Person with responsibility to communicate union information between members and regional offices and to represent the union members to management.

Requisition – Refers to a written order or request to buy an item. Once approved, the requisition is then changed to a purchase order.

Rescheduling - The renegotiating of debt conditions between borrower and lender, often the repayment period is lengthened.

Research - An investigation involving the process of enquiry and discovery used to generate new business ideas.

Research and development (R&D) – Is the carrying out of research into a planned activity or experimentation aimed at discovering new knowledge with the goal being to develop new or improved products & services. Development is when the research is then translated into the design of new or improved products and services.

Reserve accounts - Reserve accounts are usually set up to make a balance sheet clearer by reserving or apportioning some of a business's capital against future purchases or liabilities (such as the replacement of capital equipment or estimates of bad debts). A typical example is a company where they are used to hold the residue of any profit after all the dividends have been paid. This balance is then carried forward to the following year to be considered, together with the profits for that year, for any further dividends.

Reserve ratio - The fraction of its deposits that a commer­cial bank holds as reserves in the form of cash or deposits with a central bank.

Reserve requirements - Regulations on the minimum amount of reserves that banks must hold against deposits.

Residual income – Refers to the income or monies that arise from earlier efforts which still continue to generate a revenue flow over time without requiring the need for any additional effort (e.g., a stream or flow of future royalty payments from a song).

Residual value - 1. value of leased property at the end of the lease term. Or 2. at any time, the actual or estimated value (that is, proceeds minus disposal costs) of an asset, also called scrap value or salvage value. Or 3. value of a depreciable asset after all allowable depreciation has been taken.

Resource allocation - The assignment of resources to specific uses i.e. determining what will be produced, how it will be produced, and for whom it will be produced.

Resource costs – Are those costs of economic elements or inputs used to perform activities. They include people's salaries, as well as the cost of materials, supplies, equipment, technologies, and facilities.

Responsibility accounting – Is used to refer to the accounting method of the collection, summarisation, and reporting of the financial information about different decision centres throughout an organisation.

Retailer - A retailer is an outlet selling goods direct to the customer (see also wholesaler). Some producers are also retailers, having their own retail branches as well as their own production sites.

Retail price index (RPI) - Measures the average level of the prices of a basket of good sand services consumed by typical households in the UK.

Retail price index - X (RPIX - X) - The method used in the UK for regulatory bodies to calculate what price increases will be allowed for privatised monopolies. The X is the efficiency gain the monopoly is obligated to make before it can increase its price.

Retained earnings - This is the amount of money held in a business after its owner(s) have taken their share of the profits.

Retainer - A sum of money paid in order to ensure a person or company is available when required.

Retirement - 1. the permanent withdrawal of an employee from employment normally due to age. Or 2. the repayment of a debt. Or 3.theremoval of a fixed asset from operative service with the appropriate adjustments to the fixed asset and accumulated depreciationaccounts. Retirement may be due to a variety of reasons such as the asset having reached the end of its useful life or it having been disposed of by sale. Or 4. the cancellation of reacquired shares of stock or bonds by a corporation.

Return on investment (ROI) – This ratio is used to measure of the earning power of assets. The ratio reveals the firm's profitability on its business operations and thus serves to measure management's effectiveness. It equals net income divided by average total assets.

Reverse repos - When gilts or other assets are purchased under a sale and repurchase agreement.They become an asset to the purchaser.

Reverse takeover - Where a company takes over a larger company than itself. IT can occur in different forms: 1. a smaller firm entity over a larger one.; 2. a private company purchases a public comapny.

Revolving credit – Refers to a line of credit that has been extended to customers who may then use it as often as they desire up to a certain predetermined monetary amount. Common examples would be an overdraft facility with a bank or a credit card.

Revolving fund – Is a fund where the money that is used it is replaced An example would be the petty cash fund under the imprest method.

Rework – Is used to refer to the process by which an item is changed in order to improve on it or in order to make it more suitable or useful for a particular purpose or job. e.g. to redesign or reengineer a poor product into one that does the job it was originally intended for.

Ricardian neutrality - The proposition that the financing of a government deficit has no current effect because private saving will just offset any government dissaving. Hence, if the government increases the national debt, private agents will save enough to cover the future taxes required to repay the increased debt, leaving national saving and aggregate demand unchanged.

Rising cost industry - An industry in which the minimum cost attainable by a firm rises as the scale of the industry expands.

Risk - Is used to refer to the measurable possibility of something losing or not increasing in value. Risk is not the same as uncertainty. Uncertainty is not considered to be measurable. Or, when an outcome may or may not occur, but its probability of occurring is known. Peoples actions are influenced by their attitudes towards risk. Many decisions are taken under conditions of risk or uncertainty. Generally, the I the/probability of (or the more uncertain) the desired outcome of an ac the less likely it is that people will undertake the action.

Rollover - 2. the movement of funds from one investment to another. For example, when a certificate of deposit or bond matures, the funds may be rolled over into another certificate of deposit or bond. Or 1. the renewal of a short-term obligation by mutual agreement of debtor and creditor. This short-term debt appears under current liabilities. Footnote disclosure of the arrangement is made along with major provisions.

Royalty – Refers to the monies paid to use property, such as the use of copyrighted materials and natural resource extractions.

Rule - 1. the directive, instruction, or order detailing something to be done. Requiring the cash receipts to be counted at the end of the day to assure that the physical cash received agrees with the recorded book amount is an example of rule. Or 2. the statement governing procedures, interpretations, or inferences belonging to sets of operations or decisions.

Rule of thumb – Refers to an approximation or useful method which is based on an individuals experience rather than the use of a precisely accurate measure.

Run rate- A forecast for the year based on the current year to date figures. If a company's 1st quarter profits were, say, $25m, they may announce that the run rate for the year is $100m.